Has the Supreme Court opened the floodgates for future group actions?

Mastercard & Ors v Walter Hugh Merricks [11.12.20]

Further to our previous update, on 11 December 2020, the Supreme Court dismissed Mastercard’s appeal against Walter Merricks. This landmark decision takes us a step closer to the granting of what would be the largest group action in the history of England and Wales.

Mastercard appealed former financial services ombudsman Walter Merricks’ application to lodge a £14 billion group action called a Collective Proceedings Order (CPO) against it after claims it broke competition law. The Court of Appeal last year overturned the Competition Appeal Tribunal’s decision not to allow the CPO to proceed. The Supreme Court largely agreed with the Court of Appeal, and the application will now go back to the Tribunal to be re-considered in line with the legal direction now provided by the Supreme Court.

If the CPO is certified by the Tribunal on this occasion, which appears likely, the claim could see approximately 46 million consumers compensated several hundred pounds each.

Commenting on the case, Kennedys partner Samantha Silver said:

This decision clarifies the test to be applied by the Tribunal in certifying a CPO; the bar has been set lower than businesses and their insurers will have hoped. There will almost inevitably be an increased appetite amongst claimants and consumer groups, and their funders, to take advantage of the opportunities presented and the field is now wide open for the proliferation of large opt-out group action applications in England and Wales.

Supreme Court majority takes holistic approach

The decision of the Supreme Court was not unanimous amongst the bench of five judges. Their differences of opinion make for interesting reading, demonstrating the tension between ensuring that consumers have access to justice whilst preventing the regime from being misused.

The majority of the Supreme Court favoured taking a somewhat holistic approach to the question of whether or not a CPO should be certified, stating that this required a balancing exercise of all relevant factors rather than a focus on one particular consideration. This approach has regard to the overarching purpose of the collective proceedings regime, namely enabling a class of consumers to pursue their rights to compensation without individuals within that class having to prove loss, and serving as a disincentive to unlawful anti-competitive behaviour.

However, those judges in the minority cautioned against diluting the role of the Tribunal by setting too low a threshold on the certification process which was designed to act as a safeguard against unmeritorious claims. Fairly stark warnings were given about what may be very large opt out group actions having the potential to be used “oppressively or unfairly” to force defendants to settle, particularly noting that this is an area which attracts, and is intended to attract, litigation funders whose dominant interest is profit.”


This case centres around the claim that Mastercard broke competition law for almost 16 years by charging excessive ‘interchange fees’ – the fees a retailer pays to a credit or debit card company when a consumer uses their card, which were then passed on to the consumer.

The claim has been brought on behalf of all UK shoppers – unless they choose to opt-out – and will affect anyone who was living in the UK of working age between 1992 and 2008, even if they did not have a Mastercard.

This judgment directly affects cases in the sphere of competition law. An analysis by Kennedys as to whether, and if so how, this decision may impact group action litigation more widely in England and Wales will be examined in a separate paper to be published shortly.

Read other items in London Market Brief - February 2021